[[File:Audi Q7 SUV.jpg|thumb|right|Dadra and Nagar Haveli licence plate on the Audi Q7]]
Another major contributor to the economy are the manufacturing industries. Due to heavy industrialisation in the region owing to tax stops for industries in the union territories, a steady growth in employment has been observed. The employment generation is increasing at the pace of 5% per annum.
Industrialisation in the area began in 1965 when the first industrial unit in the UT was started at Piparia, Silvassa in the cooperative sector by Dan Udyog Sahakari Sangh Ltd, following which three industrial estates were established at Masat(1978), Khadoli(1982) and Silvassa (1985). Earlier (before 1965) only traditional craftsmen who made clay pots, leather items, viz., chappals, shoes and some other items of bamboo were present. Since there was no sales tax in the UT, it attracted many entrepreneurs. Around 30 new units comprising Engineering, fabric weaving units and dyeing and printing units were established till 1970.
In 1971, UT was declared as industrially backward area by Government of India and increased the cash subsidy to 15 to 25% for the industrial units on their capital investment which resulted in the speedy industrial development. The scheme was however terminated from 30 September 1988. Sales Tax Act was implemented from January 1984 till 1998 under which industries enjoyed sales tax exemption for 15 years from the start-up date. [[VAT]] was introduced in 2005. At present the newly established units get Central Sales Tax exemption which will continue till 2017.<ref name="dnh_ind" />
|Large scale industries|| 28
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